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Questions About Student Loan Refinancing Interest Rates

Should I refinance my new car now, with mediocre credit, or wait a year until my situation improves?

I bought a 2009 Mitsubishi Eclipse back in April. Not my best decision ever– it’s $680 a month at 16.9% interest (yeah I know :/ ).

My situation now: I make about $20,000 a year at my job. I have maxed out credit cards totaling about $7,000 and lots of student loans.

My situation December of 2010: I will be graduating from school then, and hopefully find a teaching job. My salary will go from $20,000 to about $31,000. All of my credit cards will be paid off (I already cut them up).

My question is: Should I try to refinance now, in spite of my poor credit, just so that I can reduce my car payments and interest rate in the mean time, or would it be best to wait about a year and a half until my situation has improved?

Thank you for your advice!!

Industry Expert answers:

I doubt you will get it refinanced. You also need to consider, even with good credit, used car interest is higher. You have been paying a very high rate so a big portion of you payment went to interest. You are probably upside down in your car by several thousand.

Car finance people love to tell you that you can refinance after your credit improves but that is just to get you to buy. Wishful thinking on your part. Get your credit cards payed off and start paying extra towards the principle of your car.

Next year probably will not be any better. Look at the loan amortization to see how your payments are being applied. Look at the value of your car. You need to work to get the payoff less than the value before you do anything.

Can I refinance just my 1st mortgage?

I want to refinance just my 1st Mortgage.
I have a 5/1 Interest only loan. Resetting 09/2011.

I want to refinance only my first mortgage from an ARM to a 30 year fixed. (It’s currently $608K)

I want to keep my second as is ($152K ARM)

Due to declining home values, I have very little to no equity in our home. However, I just want to refinance the 1st (which would be plus or minus about 80% of my current home value).

I have both loans through Wells Fargo.
WF say they can’t do anything unless I have 10% equity.
So I’m looking around for ideas.

I have: Good credit. No car payments. No student debit. No credit card debt.

Any thoughts or other ideas.
I’m happy to keep my 2nd as is.
Just want to get the $608K fixed at a low rate.

Thanks

Industry Expert answers:

With banks being extra cautious these days I’m not surprised the won’t let you refinance. You have a huge loan on a house with indeterminate value. I know people who have 20+% equity, and in the process of refinancing, banks are requiring 2 or even 3 property value assessments before closing. And this is for individuals who earn $150k+, have excellent credit and are looking to refinance a loan of $200 – $300k. On the bright side, if your ARMs run out, rates should be quite low for while.

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